This study took preliminary steps to explore the relationship between involuntary outpatient commitment (OPC) and the risk of homelessness among individuals with severe mental disorders. Involuntarily hospitalized patients were randomly assigned to be released or maintained under OPC following hospital discharge. Multivariate analyses demonstrated that involuntary OPC was associated with a significant decrease in the risk of homelessness during the first 4 months following hospital discharge for participants with severe functional impairment at baseline. OPC did not appear to affect risk of homelessness among participants with mild-to-moderate functional impairment. Co-occurring substance abuse, treatment nonadherence, and outpatient services intensity were found to be strongly associated with episodes of homelessness. This study suggests that involuntary OPC may provide a short-term reduction in the risk of homelessness among a subgroup of treatment-reluctant individuals with severe mental disorders combined with severe functional impairment.